MFDA study aims to shed light on impact of regulatory policy initiatives

By Susan Yellin | April 28 2017 09:46AM

Photo: Freepik

The Mutual Fund Dealers Association of Canada (MFDA) is poring through mounds of data it has accumulated from its members in hopes of being able to identify, with some certainty, the impact of regulatory policy initiatives, such as the potential ban on embedded commissions, on both clients and advisors.

Mark Gordon, president and CEO of the MFDA, told the Federation of Mutual Fund Dealers’ annual conference held in Toronto this week that the project has been a year in the making and has reaped some far-reaching data that can help the self-regulatory organization identify vulnerable clients and advisors and set a benchmark for future research.

Client Research Project

The Client Research Project covered 100% of the MFDA client population following a “mandatory request” to members, Gordon said.

The MFDA received 500 million pieces of information from more than nine million households, incorporating 16 million accounts and thousands of investable products, he said.

“The data that we now have for this project is incredibly valuable,” said Gordon.

The statistics will provide the MFDA with a mutual fund wealth management footprint, the business models members are following and a better picture of client demographics.

Embedded fee proposal

“Focusing on regulatory policy initiatives, we’ll be able to conduct some analysis as to the potential impact a certain initiative may have on clients, dealers and communities, such as the embedded fee proposal. This data will help us answer some of those questions.”

The information should also help identify affected client groups, where they live and what advice options remain available to them, he said.

Potential scope

Gordon said while the MFDA will not be able to predict the exact effect of a potential regulatory proposal, the SRO will be able to identify, with some degree of confidence, which stakeholder groups, advisors and dealers will have the greatest chance of being affected as well as the potential scope of that impact.

A full report on the project is expected to be released in the coming weeks.

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